Satyam's expanded board meeting underway

The government-appointed directors of fraud-hit Satyam Computer Services began a meeting in Hyderabad on Saturday with the focus on how much the company immediately needs to pay salaries and meet other expenditure and on finding a chief executive officer (CEO) to run its day-to-day operations.

Satyam, India's fourth largest IT company, has been without a CEO and a group of senior staff members are running the show since Jan 7, when founder-chairman B Ramalinga Raju confessed to massive rigging of accounts and quit.

Raju, his brother B Rama Raju, who was Satyam's managing director, and the chief financial officer Vadlamani Srinivas have been arrested and sent to jail till Jan 23. All the three have sought bail and a Hyderabad court will rule on their plea on Monday.

"All six members of the board are attending the meeting," a Satyam spokesperson said.

The six are HDFC chairman Deepak Parekh, former president of software sector's umbrella body Nasscom Kiran Karnik, former SEBI member C. Achuthan, Tarun Das, chief mentor of the Confederation of Indian Industry (CII), TN Manoharan, a noted chartered accountant, and Suryakant Balakrishnan, a nominee of the LIC of India.

Parekh, Karnik and Achuthan were appointed Jan 11 and the other three on Thursday.

This is the first meeting of the expanded board, though Parekh, Karnik and Achuthan had met Jan 12 itself to familiarise with the company's financial position as Raju's confession put the financial irregularities like inflated profits and non-existent deposits at Rs 70 billion (Rs. 7,000 crores).

The government-appointed board's priorities are getting a correct picture of Satyam's finances to determine whether they need to borrow funds immediately for the day-to-day operations and to find a ceo for the headless company.

Besides revisiting the figures, the six members will exchange views on probable candidates for the two top posts to lead the company - Chief Executive Officer and Chief Financial Officer.

The appointment of a CEO and a CFO are among the priority tasks of the new board, Parekh had said after the first meeting Jan 12.

The other concern is the company's liquidity position, which according to Parekh seemed to be favourable provided the figures could be trusted.

He said Friday that the company has receivables (payment from customers) of Rs 17 billion (Rs 1,700 crore), which, however, have to be verified.

His comments on the receivables came after he met Corporate Affairs Minister Premchand Gupta amid talk of a possible government bailout package to help the company pay salaries, rents and health insurance premium.

Gupta, however, said the government was not offering any bailout to Satyam and the new board can approach financial institutions if funds were required.